29 Jan callable bonds.

ACCT212 Financial Accounting

WEEK 5 CHECKPOINT

Question 1

(TCO 6) An asset with no physical form, but that has special rights to current and expected future benefits is a(n)

intangible asset.

natural resource.

plant asset.

fixed asset.

Question 2

(TCO 6) The process of allocating the cost of a plant asset to expense over the period in which the asset is used is called

amortization.

allocation.

depreciation.

disclosure.

Question 3

(TCO 6) All of the following are classified as natural resources and are depleted except for

land.

timber.

minerals.

oil.

Question 4

(TCO 6) An investor who owns 25% of the outstanding stock of another company should report the investment using the

market value method.

consolidated method.

equity method.

historical cost method.

Question 5

(TCO 6) All of the following are necessary to compute the future value of a single amount except the

interest rate.

number of periods.

principal.

maturity value.

Question 6

(TCO 6) All of the following are reported as current liabilities except

bonds payable.

sales tax payable.

accounts payable.

unearned revenues.

Question 7

(TCO 6) The current ratio is current assets

minus current liabilities.

divided by current liabilities.

plus current liabilities.

multiplied by current liabilities.

Question 8

(TCO 6) If bonds are issued at a discount, it means that the

market interest rate is higher than the stated interest rate.

market interest rate is lower than the stated interest rate.

financial strength of the issuer is weak.

bond is convertible.

Question 9

(TCO 6) Bonds which are backed only by the good faith of the borrower are referred to as

junk bonds.

unregistered bonds.

debenture bonds.

callable bonds.

Question 10

(TCO 6) The financing option that has the lowest risk to a company is financing by

retained earnings.

issuing stock.

issuing bonds payable.

issuing notes payable.